If you’re going to buy any type of real estate, you need to make sure it is properly zoned for the way that you want to use it. This is not always as intuitive as it seems. For instance, some homes are in mixed zones and can legally be used as businesses, which is why you see hair salons, CPA offices and other businesses in buildings that were clearly originally constructed as single-family homes. Similarly, just because something is zoned for business use doesn’t mean any business can be established there.
8 examples of common zones
As you look into the property before making an offer, here are some of the main zones you may find:
- Light industrial
- Light commercial
- Single-family residential
- Multi-unit residential
These examples give you some idea of the classifications within different areas. For instance, just because a building is a home does not necessarily mean you can rent it out. Some investors buy older homes and divide them into multiple apartments. This is allowed in a multi-unit residential zone but prohibited in a single-family residential zone. That doesn’t mean that renting itself is necessarily barred, but you can only rent to one family at a time. Some areas also have regulations preventing you from renting to a group of college students, for instance, but allowing families to live in those homes.
Do your research in advance
When buying real estate or investing, it’s important to do your research in advance. Learn exactly what you’re agreeing to before making the offer, and take the time to explore your legal options.